European Central Bank President Christine Lagarde said Thursday that the independence of the Federal Reserve remains at risk, requiring ongoing support from voters and lawmakers.
Speaking in Cambodia, Lagarde noted that the ability of policymakers to make decisions that may displease governments faces growing threats amid multiple economic shocks that drive prices higher while slowing growth.
Lagarde emphasized that independence can be protected when credibility exists, and that defending it does not rest solely with the central bank.
She argued that independence can be maintained by concentrating on inflation as the primary objective, even when it carries an economic cost.
